New real estate laws take effect January 1

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An exterior shot of the Texas Capitol

12/11/2015 | Author: Editorial Staff

This year’s legislative session resulted in several new or revised real estate-related laws. Here are six that kick in January 1.

A big tax cut for Texas businesses
The franchise tax has been reduced by 25%. This reduces the tax burden of any large real estate business that is subject to the franchise tax.

New TREC rules
Several rules, regulations, and procedures for the Texas Real Estate Commission have been created or revised, including …  

  • Changes to certain definitions and terms—for example, “salesperson” is now “sales agent”
  • Increasing the number of CE hours required to renew a licensed from 15 to 18
  • A new rule allowing TREC to determine the text and delivery of consumer notices, including the Information About Brokerage Services and Consumer Protection Notice. This change resulted in revisions to these notices effective February 1, 2016.
  • A new rule that TREC cannot increase education requirements by more than three hours per license-renewal period.

Refining the appraisal-protest process
Property owners who appeal their appraisal using equal and uniform protests will have to use generally accepted appraisal methods and techniques if they claim the property was appraised higher than comparable properties. Also, property owners will be able to use properties in other counties as comps if there aren’t enough comps in their own county.

More input required to increase property-tax rates
Local taxing units, such as municipalities and counties, will be required to have a supermajority vote of approval (at least 60% of the governing body’s members) before the taxing unit can increase its property-tax rate. In addition, a local taxing until that increases its property-tax rate will have to post a notice on its website homepage that the rate is increasing.

Cost savings for landlords
Landlords will be able to deduct the cost of rekeying a security device from a tenant’s deposit when the tenant vacates a rental property in breach of a written lease, as long as the lease includes specific language. The TAR Residential Lease has been revised to include this language.

An additional disclosure
Sellers will be required to disclose whether any portion of the property is in a groundwater conservation district or subsidence district. TAR’s Seller’s Disclosure Notice and TREC’s Seller’s Disclosure of Property Condition have been revised to addresses this. 

Categories: Property Management, Forms, Legal, Governmental Affairs
Tags: new laws, forms, contracts, trec


Susan Horton on 01/28/2016

Mike a couple of suggestions and or comments.  1.  Email Signature Box…We are requesting that our agents go to Zip Forms and run an update so they have all of the current documents.  2.  To update their personal information so that the correct Realtor information will show at the bottom of the form.  3.  To complete and save their personal information on the IBS form for future use.  4.  Then attaché the form to their email signature. 5.  Website… We will have a brief explanation of what the form is and a live link, when the link is opened the document will be there.
I hope this helps.  Good Luck.


Mke Sanders on 01/27/2016

Confused again.  How do we display the new required form on the front page of our web site.  Feb.1 is not far away and everyone I have talked to has a different idea.  I was going to I put a hot button on my front page to go to the trec site where the form I located.  Would this work ?Any other Ideas

Susanna Boyer on 01/26/2016

Susan is absolutely correct. You can not do business legally until you get sponsored by another broker.

Susan Horton on 01/26/2016

Harry it automatically goes inactive until they accept sponsorship from another Broker.

Harry D. Urey Sr. on 01/25/2016

What happens to the license of a realtor, if their broker dies.  I can’t find the answer.

Susanna Boyer on 01/12/2016

Exactly, Mike & Susan…Serving on Professional Standards and having been involved in Tribunals, Ethics & Arbitration hearings, and serving as an Ombudsman, you hear so many things that really shouldn’t happen if the agents were mentored properly or held accountable for their actions. In the 9 years I’ve served, I’ve heard some real messes.

Susan Horton on 01/12/2016

Well said….. I have served on Professional Standards for both ABoR and TAR and you are so correct it is an eye opener.  Brokers are the key so how do we get them to engage?

Mike Sanders on 01/12/2016

The problem of more education is simply, low quality teaching and watered down content in those class will only produce a soggy mess and not more educated salespeople.  Classes without accountability will not fix the problem of agents that are not supervised by their brokers and taught to do things right.  I may be wrong but it seems when the brokers were more responsible for the actions of their sales people, we did not have some of the problems we have today.  We have brokers that never see what the people they sopnsor is doing.  If you have never been on the professional standards commmitte, try it, it will really open your eyes.

Susan Horton on 12/31/2015

I am in total agreement regarding the out of control HOA fees.  You would think that they were within their rights as set up in the original covenants and restrictions which are legal documents.  It is very important for Real Estate Agent regardless of representation of buyer or seller to research the HOA fees prior to writing a contract.  These fees could break a transaction for some buyers.  Again another reason to invest in TREPAC, let your voice be heard, go to your local Association TREPAC Chair, go to TAR TREPAC Director, get involved you can make a difference.  Someone must address this issue.  Why not us?

Gloria Lucas on 12/30/2015

I have had several NEW homeowner / clients to later contact me asking if it’s LEGAL for their subdivision Property Management Companies to charge Transfer Fees ($200), Refinance Fees ($75), and Resale Certificates Fees ($200 to $300) when they purchase a dwelling.  The new residents are being charge an average of $500 by these subdivisions management companies and it’s listed on the HUB Settlement Statement to be paid directly to the management companies. 

Does anyone know if this is Legal for management companies to do??

Susan Horton on 12/29/2015

Regarding TREPAC Investments, Thank you for continuing to support Private Property Rights by investing in TREPAC…... As long as you are a licensed Realtor you should invest in TREPAC to protect your business.    To address Fred Upman’s comments and clarify…. yes we have worried for years that at any given time the Legislators could decide to add a sales tax or transfer tax on the buying or selling process of real estate transactions.  The tax would have been costly to say the least.  Thanks to your TREPAC investments this fear is NOW forever gone.  Early November 2015 Texas Voters, Voted and Proposition 1 was passed in the State of Texas prohibiting a sales tax or transfer tax on real estate.  Thank you for investing and for voting.
Susan Horton

Blanca Houston on 12/29/2015

I hold a brokers license in another state.

When I was taking classes and the instructor asked if anyone else was licensed in another state, I told them I hold a Texas License. 

The instructor said, “Texas is the Gold Standard” of licenses. 
In a large state such as ours, there is a greater risk for what can go wrong and those who will not follow the rules.  It is what it is.  Thank you.

Clara Taylor on 12/27/2015

The Texas Real Estate Commission has an interesting make up of Brokers and Lawyers.

I have always felt the public should be better represented by individual appointments that represent all involved in the industry. Those using and those responsible for content of all required by the commission of those licensed in Texas.

Examples of possible appointed positions. Broker, Agent, lay person (consumer) Title Company, Lawyer, School Owner would better represent oversight of the industry at large to better represent and protect the consumer.



Lilly Hughes on 12/27/2015

As to education. I don’t care what any other State does. And no matter how many hours we are having to take, it’s not enough because you can encounter agents on almost daily basis who don’t even know how to fill in the blanks on the form or do not fill in the blanks, who still don’t understand that the option period ending date and time is a drop-dead deadline. I’ve had a broker tell me we didn’t have to pay anything to extend the option period. The number of hours is not the answer. There should be, in my opinion, no pre-licensing course offered by online delivery. You learn to much of the nuts and bolts from the teachers which is more difficult to deliver in an online setting. There needs to be an apprentice period of some kind. I know that may interfere with the independent contractor relationship, but I’m sure some lawyer can find a loophole for it. There needs to be more substantive classes for continuing education. And lastly, no matter how much you think you know or how long you have been in the business, you don’t know it all and need to keep on learning. I’ve met agents in the past who didn’t know what time of day the option period ended. I wonder how many will know six months from now that the time has changed?

Rick Chumsae on 12/19/2015

To Gail Spinn,
Texas has the highest requirments in the nation to take the salesagent test, 210 hours. California is 90 hours.  The state next closest to Texas is Colorado at 160. The lowest hurdle is Minnesota at 30. Only a handul of states have the additional requirement for first year of practice education with Texas the most stringent at 60 hours.  Texas also has the most stringent education requirments for taking the broker test at 910 hours (that would be about thirty 30-hour courses, or about twenty two 30-hour courses beyond initial licensing requirements.

EDITORIAL: I like the fact that we are the most stringent in the nation for licensing because that directly translates to us providing higher levels of consumer protection to our citizens. We are members of an elite club and we should be glad that we are.  Just imaging a salesagent in one of the low-requirement states explaining Law of Agency, or even conducting business.  They have no clue what a client is unless, though experience, trial and error, they finally get it. So, 18 hours for MCE? Okay by me, I need it, and I have closed over 300 transactions.  I NEED it.

What do others think?  I mean really?

Debbie Russell on 12/19/2015

In response to Outraged Citizen and Fred Upman’s comments I was recently introduced to the thought that each average family of 4 making $50,000.00 per year contributed less than $100.00 innFederal Tax Returns for food stamps and welfare of others while that same family had to pay approximately $6,000.00 in corporate tax entitlements.  I have not researched this enough to know if it is true or not.  I only know that a few months prior dear friends and clients were telling me that the amount of money that working tax paying citizens paid to entitlements aimed at those that don’t work are absolutely nothing as compared to the Corporate entitlements we all pay.  This is new food for thought for me to investigate.  It sounds like both of you already have thoughts or feelings along these lines.  Share by all means as I want to learn more about this.

Fred Upman on 12/18/2015

I’m fed up. Don’t expect any more pac money from me and btw quit using the sales tax scare tactics on us and our clients. You and NAR do that every year and then sing your praises of success only to come back the next year and ask for more money. Come up with another scam for a change.

Gail Spinn on 12/18/2015

Texas, I believe is the second highest ranking State in requiring more hours for license holders, just behind California.  Correct me if I am wrong.  Yes, it is a pain but in the end run, we have more educated agents who can effectively represent their clients, answer questions and in general make for a transaction that is more comfortable for buyers and sellers ... and isn’t that why we are all Realtors?? Most Buyers and Sellers are our clients and they depend upon us. Let’s do the best job we can to help them because believe me they DO appreciate it….and they tell others.

Susanna Boyer on 12/18/2015

The “evidence” that we should spend time and money on 3 more hours, is the FACT that there are agents out there that need the extra hours…and they need to take live classes, so they don’t just fill in answers on an online test until they get them right. There are still agents practicing that give keys out to their buyers before a transaction closes and FUNDS.  There are agents that - even though a Seller wants out of a listing contract, because the agent is not selling their property - they tend to continue to hold the property at bay so the seller cannot list with anyone else and sell their property…these are just a few examples of agents needing more education and looking out for their client’s best interests instead of their own.

We are a profession that needs to be more professional.  Hopefully, by adding more hours, and I hope they add even more in the next legislative session…we will get the education we need to become more professional.

Virgil Eaves on 12/18/2015

It sounds to me like the requirement to use “generally accepted appraisal methods and techniques” is an effective elimination of real estate practitioners assisting their clients before the taxing authorities.  Clients will be forced to pay a certified, separately licensed appraiser.  This will effectively eliminate most protests from low and middle income property owners due the cost of the appraisal.  The taxing authorities pay their former state politician lobbyists very well…from your tax money.

Dan Batte on 12/18/2015

For Groundwater Conservation District map :

Carolyn Matkin on 12/18/2015

Where are we to find out about the property being in a groundwater
conservation district, etc. ?

Shanon Royko on 12/18/2015

Many Title Companies offer Classes for little or no money but it still takes time.  I do agree with Ron’s comment, who determines all these class hours and
why?  I wish TREC would offer these classes for free through correspondence to make it easier.  We realtors pay enough dues and fees and our time should account for something.  Also does the seller have to contact their taxing authority to determine
whether or not they are groundwater conservation district or subsidence district?

Ron Blume on 12/18/2015

What evidence is present wherein it was determined we (Sales Agents) need to spend another three CE hours?

Roger Flores on 12/18/2015

The Texas Real Estate Commission needs to be downsize.  Their lobbying of the legislature to create more rules, more paperwork, more hours for realtors to pay for, and more obstacles to hold realtors back from producing is just gotten more ridiculous.

Today’s state agencies and politicians are nothing more than an avenue to create more state jobs for friends and have the hard working realtors pay for it.

Joe Babin on 12/17/2015

Rebecca, in our county the Groundwater Conservation District is a taxing entity.  Start by checking the property’s appraisal district tax information sheet.

Rebecca Spratlin on 12/17/2015

How does a seller determine whether or not his/her property is in a groundwater conservation district or subsidence district?

Kathy Zellman on 12/17/2015

I wish “Outraged Citizen” would explain him/herself.  If I knew, I might be outraged with you, however, I see nothing in the new real estate laws that alarms me.  In fact, I think they are pretty good.

Outraged Citizen on 12/15/2015

This State just loathes us citizens! Yet another tax break for big business, and to make up the money they charge us more.

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